Couple Money » Real Estate

Makeover Your Bathroom for Cheap

Kay Lynn — Fri, 16 Sep 2011 11:45:03 +0000

Our three bathrooms still have the original finishings and are starting to look dated. Although bathroom remodeling costs have a high rate of return at resell time, it would be a pretty penny to tackle three of them!

This is where my hours of watching HGTV are finally paying off. Here are five ideas for making over the bathrooms with a low price tag.

Replace Light Fixtures

Swapping out out of style light fixtures with a current style can quickly refresh the look of any room. Be sure to pick a style that will integrate with the overall design and look of the room. The price range for a new light fixture can range from $20 to over $500, but you can find a very nice light in the $50-$100 range.

Frame Your Mirror

I’ve noticed the trend in bathroom mirrors is to have them framed. Ours are the traditional style of mirror which is affixed directly to the wall. One of my friends told me about kits to frame the mirror without having to remove it from the wall.

Since our mirrors have started to lose some of the silvering around the edges, this solution has the extra benefit of masking that problem. The kits are available in a wide variety of finishes and materials with a price range of $150 – $250.

Change the Color

Yes, painting the room a more contemporary color is a fast and easy way to refresh the look of a room. But did you know that you can repaint that pink or blue bathtub?

It is a lot of work due to the requirement of sanding down the entire fixture before applying the porcelain paint. However, it can save a lot of money especially if your bathtub is tiled in. Since toilets and sinks are relatively cheap, I would replace them versus repainting.

Reface Cabinets

It can be costly to replace bathroom cabinets, especially when they’re attached to or built into the walls. A trick you may know from kitchen remodeling is to replace only the doors. New doors can move the look from the 1960′s to contemporary. We need to strip the white paint off our cabinets and refinish along with attaching new doors.

Replace Hardware

The hardware I’m speaking of includes the faucets, toilet paper holder, towel racks and cabinet handles or pulls. Make sure the style for all of these are complementary and the same color.

These are easy to overlook because you see them every day but can add up to making the room look old.

Just because you don’t have $10-30 thousand dollars doesn’t mean you can’t remodel your bathroom. Get a great new look for under $1,000 with these tips. What changes do you want to make at your home?

Photo Credit: steve r watson

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Options to Reverse Mortgages

Kay Lynn — Fri, 10 Jun 2011 12:00:13 +0000

On the surface a reverse mortgage seems like a good idea. And it is for some people. Before anyone gets one they should make sure all options are explored.

What are Reverse Mortgages ?

A reverse mortgage is an option for homeowners age 62 and older to convert their home equity into cash. There are no loan payments required until the owner no longer lives in the home or stops meeting the requirements of the mortgage.

In addition to the standard loan fees (appraisal, closing costs, etc.), this type of loan requires the borrower pay for mortgage insurance. The home must also be in very good condition and repairs will be required for any deficiencies.

Alternatives to Reverse Mortgages

My father-in-law could no longer make ends meet after the loss of his wife and her social security income a few years ago. He opted to get a reverse mortgage, but I don’t think he seriously considered any of these options below.

Shared Housing

Many people moved to shared housing during the recession, but it is also a good way for seniors to decrease living costs and still remain in their own home. Renting out a bedroom or two would have easily replaced my mother-in-law’s social security check.

For those that don’t want to share living space their home may accommodate converting the basements or one floor to an apartment or in-law suite.

Downsizing

Often seniors can get the financial breathing room needed by selling their home. They no longer need the space of the family home and it may require more upkeep. Renting or buying a smaller home would have eliminated the costs my father-in-law occurs keeping up a yard and repair on a 60 year old home.

Other Deferred Payment Loans

Some state and local governments offer deferred payment loans to low-to-moderate income homeowners. These can usually be used for specific home repairs and modifications. In California, the CalHome program distributes money through local agencies.

There are programs for property tax deferral although many state and county governments have suspended them since the economic crisis began. These were generally available to seniors and/or handicapped homeowners and deferred the property tax bills until the home was sold.

After evaluation some homeowners and/or their families will come to the conclusion that a reverse mortgage is the best option to give them extra funds during retirement. It is recommended to put off getting this type of loan until needed to reduce the interest rate charged and qualify for larger advances.

Would you recommend a reverse mortgage to your senior friends and family?

Photo Credit: bgilliard

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Buying a House – Run the Numbers!

Elle — Tue, 07 Jun 2011 15:03:54 +0000

Owning a home is a dream of some people, but there are many that either feel like it’s impossible for them to achieve it. I will say up front that I don’t think home ownership isn’t for everyone. If you’re not willing to put in the legwork and run the numbers, it can be a huge financial and emotional burden.

If you’re really intent on buying a home, taking the time to get a financial plan in order can be a huge step in helping you reach your goal. It can also provide you a way to make home ownership a relatively enjoyable experience.

Keeping Total Housing Costs 30% or Less

When we first were married we had a desire to own a house at some point in the future. At the time however, we knew that we weren’t financially or emotionally ready for the big responsibility. We focused on handling that first before we even gave serious thoughts to house hunting.

The biggest financial preparation was getting into the mindset of living off of one income. Even though we’ve been a two income couple, we felt that living simpler and below our means would help us reach some of goals quicker. At the time, they included:

Having a decent size emergency fund.
Pay down high interest debt (like my car loan)
Have some savings set aside for a house down payment.
Have wiggle room in the budget to go on some vacations and eat out a bit.

It would’ve been impossible if we tried to do it all while having our day to day budget be based on both incomes. I was an intern at the time, so it made sense to us to base the family budget on my husband’s pay. We’ve done our best to keep to this system.

When we were looking at a house to buy, we also made the choice to focus on only one income. For us, it meant that we focused on keeping the numbers based on net pay, not gross income. While we could’ve looked at more houses in “our price range”, we decided to stay within our self imposed limits. It gave a us measure of comfort, knowing we were having a bit off buffer with our finances.

Another reason for us to be conservative was our goal to have a reasonable interest rate with our mortgage. We knew that in addition to the down payment we’ll put down, the lenders were looking at a couple of other numbers to determine the interest rate they offered.

Debt to Income Ratio

Having a high amount of debt can ruin your chances of getting a loan. Lenders want to know that you can make these payments for years down the line and your debt to income ratio is one thing they analyze.

Your debt to income ratio is calculated by simply taking all your debt (student loans, credit cards, car loans, etc) and dividing that amount by your income. You want to make sure your ratio is lower rather than higher. If your debt to income ratio is higher than 36%, you could have a hard time qualifying for a mortgage.

Loan to Value Ratio

Another reason to take your time and build a down payment is the loan to value ratio and how it affects your chances of getting a mortgage. The loan-to-value (LTV) ratio is basically the mortgage loan amount you’re hoping to get divided by the appraised value of the property you’re considering to buy.

Your Other Financial Goals

This is important becuase lenders and real estate agents don’t figure this into their calculations. Your lifestyle will be affected significantly unless you plan accordingly.

Do you have enough to save for retirement?
Can you stash money away for your child(ren)’s college fund?
Can you go on the vacations you want to go on?

What If You Really Want to Buy a House?

Buying a house can be a great financial and personal goal to have if you prepare ahead of time. You have basically have some options to look at carefully before you make a final decision.

Be patient and wait a bit until you buy your house. Give yourself more time to have a bigger down payment. This will lower your mortage loan amount you’d need. Prices could stay lower than normal with unemployment problems continuing.
Focus on getting a starter home. You can still buy a home, but you might consider getting something a bit more inside your price range, so you have bigger amount of wiggle room. If you’re buying your first home, a starter home can a better option. You may upgrades years down the road or you might find you like the house and stay.
Go for the home. If you’re in a position to get the home you want, that’s great. Just make sure you double check it is something within your budget. Otherwise, consider the first two options.

Our Essential Housing Expenses

If you’re thinking about being a home owner, here’s how our current housing costs break down to give you an idea of what to expect:

Mortgage $ 661.57
Escrow * $192.18
HOA Fees $112

Total $965.75

*Our escrow account takes care of homeowners insurance and property taxes.

Of course the numbers will be different for everyone, but it’s good to get an idea of what actual people are paying. Some may note we don’t include home repairs that may come up from time to time with our calculations. We have done is set aside savings which includes covering such expenses. It’s a new community and so far we haven’t had to make any big repairs. Additions such as adding ceiling fans to the rooms are done on a cash basis, we plan ahead for the small projects and save money up for the purchases.

Currently our housing expenses have been steady. The only big purchase we had to make since we bought it was the washer and dryer set. We bought those used off of Craigslist and they had served us well. Once they both stopped doing their washing and drying properly (2 cycles sometimes), we bought another set with savings we had set aside.

Thoughts on Buying a House You Can Afford

How did you how much mortgage you could afford? Did you rely on the estimate from the lenders or did you run the numbers yourself? Did you receive any pressure from your real estate agent to get a more expensive house? If so, how did you cope with it?

If you’re a home owner, what kind of mortgage did you get and why?

Photo Credit: Images_of_Money

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Home Equity Lines of Credit – Something to Consider?

Elle — Thu, 26 May 2011 13:10:56 +0000

Recently a relative of mine decided to convert a portion of her home into a small rental unit. The goal was to earn some extra money while renting out the space to someone she knew. Unfortunately it hasn’t turned out as well as planned.

Now she’s stuck with a place that needs work done to get it properly finished and since she is limited in funds, she’s looking at getting a loan to cover these expenses. The good news is that it doesn’t look to be huge, but it is more than what she currently has in savings.

She’s thinking about getting a HELOC as a possible option.

Home Equity Line of Credit: A Great Option?

As the name suggests, a home equity lines of credit (or HELOC) is a line of credit based on the equity you’ve accumulated with your property. Some borrowers use HELOCs to consolidate their debts and pay them off faster. Others use it for home improvement projects.

Lenders calculate equity based on what your home is worth and what you owe on the mortgage loan.

How a HELOC is Calculated

Banks are more careful with how they calculate HELOCs, but it’s still possible to open an account if you have a good or excellent credit report. Let’s say you have a home that is appraised at $200,000. Your mortgage on it is currently $130,000. You could qualify to borrow as much as $30,000.

For one bank that loan amount would be broken down at $206.25/month at 8.25% for 3 years.

Checking Wells Fargo, the lender offers this advice on how much to request for a HELOC:

To improve your ability to qualify for a Home Equity Loan or Line of Credit, your loan or line of credit amount plus your current mortgage balance should not exceed 80.00% of your home’s value — your Combined Loan to Value ratio (CLTV).

It’s a buffer for them, and believe it or not, you. Should your property value drop too much, it can be a huge problem.

Don’t Get Burned

Both HELs and HELOCs use your house as collateral. That’s a risky proposition,though, because if you can’t make payments on all of the lenders, technically any of them can foreclose on your home. Lenders also have the ability to reduce your line of credit as well, so please be careful.

Not knowing my relative’s financial state, I can’t say if this is a good option for her or not. If she asks for more help from me, I’m going to suggest that she look at the cold, hard numbers before she signs up for either option.

Thoughts on Home Equity Loans & Home Equity Lines of Credit

Have you ever had to get a HELOC to cover a renovation or repair? Have you used a HELOC as an emergency fund? How did it work out for you?

Photo Credit: Images_of_Money

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Dealing with Irregular Household Chores

Kay Lynn — Fri, 29 Apr 2011 12:00:13 +0000

My husband and I are not the type to obsess spend much time thinking about what needs to be cleaned or inspected around the house. What usually happens is that something breaks or it hits one of us that the carpet has a couple of stains or the windows are dirty.

We know regular maintenance is the secret to keeping a home in tip top shape; we just aren’t naturally good at it. A solution to that dilemma was creating a list of the irregular maintenance chores with a timeline.

Having a condo has cut down the list significantly so yours may need to have exterior yard and structural additions such as roof inspections. Anything performed more often than twice a year doesn’t go on our list.

Semi-Annual Household Chores

Carpets - We either do it ourselves or pay for professional carpet cleaners twice a year. That may be more often than some, but we have two pets that bring dirt in from outdoors. Eventually, vacuuming isn’t enough.

Smoke Alarms – It might not be needed with the life of batteries these days, but we replace the smoke alarm batteries twice a year in coordination with daylight savings changes.

Air Filters – We change the filter in our heating and cooling system twice a year normally when we switch seasons. It’s amazing how much dust gets collected during that time period. Keep your system operating efficiently with a clean filter in place.

Sinks and Toilets- Checking sinks and toilets for drips can save water and avoid bigger problems. Be sure to check caulking around sinks, tubs and showers.

Annual Household Chores

Windows – I clean areas of the windows throughout the year, but try to get them professionally cleaned once a year. I dread the job enough to be willing to pay someone else to clean the windows, screens and sills.

Appliances – Check the hoses and plugs of large appliances. Be sure to pull them out and clean out any dust or dirt that may accumulate.

Hot Water Heater – A standard recommendation is to drain the water heater once a year to reduce sediment buildup, but I’ve never done it. Instead we clean the water heater area and check for any problems with lines.

Chimney – Before starting the first fire of the year my husband inspects the chimney, firebox and flue for any cracks, blockage or other problem. The chimney is professionally cleaned every couple of years.

Maintaining your home proactively results in simpler problems to fix at reduced costs. What other irregular maintenance chores do you do at home?

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